Abercrombie Could Still Crumble

Strong quarterly results sent shares of Abercrombie & Fitch surging but the teen retailer is no bargain.

While Abercrombie & Fitch is wowing Wall Street today with stronger-than-expected fiscal third-quarter results, investors in the teen retailer could still lose their shirts.

Abercrombie & Fitch (ticker: ANF) surged more than 25%, or $7.99, to $39.24 in midday trading Wednesday after reporting a rise in third-quarter sales and profit. Net income totaled $71.5 million, or 87 cents per share, for the period ending Oct. 27, versus $50.9 million, or 57 cents per share, a year earlier. Analysts expected earnings per...